MESSAGE FROM JACKO 470

It is 1.00am NY time Wednesday October 21 and the market is at 1.4927

This market has been in a a strong bull market and if I take the shorter term view of the 4H chart and look at the Support line from 1.4480 (Oct 2) and 1.4687 (Oct 12) and 1.4828 (Oct 18) and 1.4882 (Oct 20) and 1.4888 (Oct 20) , we can see the very strong short term Support line which is now at 1.4900.
However, each bounce off that line recently has been progessively smaller and smaller.
Because it is:
1. the shorter term view of the 4H charts (instead of the usual 300 bars) and
2. the steepness of that line and
3. the recent bounces off that line being smaller and smaller,
I am being very careful of trading off that line now.

The steepness of the line means that the Support line (as at 1.00am NY time) is at 1.4900. However, each move up now is returning only minimal increases before it drops back to the line (The reward of say, 30-40 pips, is not worth the risk of being caught in a break below the line)

Also, as stated yesterday, in many cases, the market moves to the critical S&R levels to coincide with a news event, so that it can use the impact of that news event to launch through a S&R level, or in some cases, bounce back down from the S&R level. It was interesting to watch that on very bad US economic news on the US Residential Building Permits and the Producer Price Indexes yesterday the market did NOT break through the 1.5000 mark

As I also stated, whichever way the market goes, usually sets the longer term direction.

Finally, the market reached a peak of 1.4993 on Monday 10pm NY time. and has moved down quite quickly

In light of the above, I am not as confident as I was about being a BUYER at the present time. I am considering whether we may be in for a break of the short term Support line down to the standard longer term 300 bar Support line (at 1.4650-1.4700) very soon. After my last trade, I am being very cautious and safe for the next few trades.

Edit 3.00am NY time The market is at 1.4942 I am watching this market carefully. I am keen and looking for a trade but the potential rewards of being a Buyer don't justify the risk at the present time.

Edit 8.00am NY time Market is at 1.4930. The Euro is maintaining it position above the Support line but has the appearance that a break may occur later today. The steepness of the line results in the Support line now being at 1.4910.
I am now starting to wonder if my previous Short trade was not as silly as I first thought. (As you will recall, based on the short term good potential risk/reward the adventurous traders and I loading up on shorts from the 1.4925- 1.4950 area . If I had used the standard 100 pip SL, I would still be in the trade).
Given the apparent inability of the market to break 1.5000, that risk/reward is now heavily favoring the short side of the market even more.
(NOTE : This is only due to the fact that we are trading the shorter term 4H charts...On the Daily charts there is no potential break of the 300 bar Support line).

Edit12.15pm NY time Market is at 1.5004 The Euro bull has shown that he is not dead and has staged an impressive recovery. In a day of no major news it has recovered and pushed higher to break the 1.5000 barrier. It is a situation where the market has sent out strongly conflicting signals over the past 24 hours but the strategy (buy on pullback to Suppport line) stands correct.